Cities, counties wait for CARES money as spending deadline nears

by Tom Coulter

Wyoming Tribune Eagle

Via Wyoming News Exchange

CHEYENNE – In Wyoming and across the United States, municipalities and counties have been forced to cut their budgets due to the economic downturn brought by the coronavirus pandemic.

In part to help those struggling governments, Congress approved a federal stimulus package in late March that gave Wyoming $1.25 billion to respond to the COVID-19 pandemic. In a mid-May special session, the Wyoming Legislature authorized Gov. Mark Gordon to spend those funds.

Along with some specific programs to aid Wyoming businesses, lawmakers also approved a process through which cities, towns, counties, tribes and hospitals could apply for some of the state’s federal relief money.

The legislation required the State Loan and Investment Board, consisting of Wyoming’s five statewide elected leaders, to review applications for approval.

But about five months after that was passed, some officials in Wyoming worry local governments won’t receive funding before the Dec. 30 deadline set by Congress for the money to be spent.

“It’s been a very slow, very tedious process that has not got much money on the street relative to the amount of money allocated,” Cheyenne city attorney Mike O’Donnell said. “We all continue to have a significant fear that with the clock ticking down, we may not be able to get these funds distributed in the way that the CARES Act contemplated, and we’ll be reverting a lot of money back to the federal government.”

As of last week, out of the $320 million allocated to reimburse those entities, about $430,000 of that money had been spent, according to State Auditor Kristi Racines. The funding had gone to two entities, a Sweetwater County hospital and Laramie County Fire District 2.

While that money represents just a sliver of the funding set aside for those entities, Racines said cutting the checks is “the very last step” in the process, and many expenses have been approved by SLIB, but not yet reimbursed.

Many expenses that have been approved but not yet paid out are to supplement payroll, Racines said.

“That payroll is going to happen no matter what, and then they’ll self-submit an invoice, and we’ll reimburse them,” she said.

Racines said the application process has gotten “gummed up” largely due to federal guidelines that prohibit the funds from being used on certain things, such as supplementing municipalities’ lost revenue. The state’s review process has involved the Wyoming Attorney General’s Office, which has carefully reviewed applications to ensure all requests are for eligible expenses.

“If we give money to the city of X, and the city of X spends it on something that doesn’t qualify, the state’s on the hook,” Racines said. “When the feds say they’re going to come back for the money, they’re not kidding. They will take the money back.”

Initially, in the application process, cities, towns and counties could apply for funds on a first-come, first-served basis. But in late August, the board of statewide leaders approved a shift to a formula-based allocation model that projects how much each entity can apply for.

While some counties and cities may apply for slightly less than their allocations under the formula, others plan to ask for a bit more than they were projected for. Torrington, for example, was allocated roughly $620,000, but it applied for about $100,000 more than that, largely to supplement payroll, Clerk-Treasurer Lynette Strecker said.

Frustrations haven’t been limited to local government officials. While hospitals in Wyoming have qualified for federal relief outside of the state-level funding, Wyoming Hospital Association President Eric Boley told lawmakers earlier this month that Wyoming “missed some great opportunities” to improve its health care facilities due to a “cumbersome” application process.

The process to distribute Wyoming’s CARES Act money over the next couple months will also be contingent on what happens in Congress in coming weeks.

Last week, Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, D-Calif., had progressed on a deal worth between $1.8 trillion and $2.2 trillion, though resistance from Senate Republicans over the scope of the package could complicate the efforts, according to a report from the Washington Post.

Renny MacKay, the governor’s policy adviser, said Friday that the state is preparing for two scenarios: one in which the funding expires Dec. 30 and another in which Congress is able to reach a deal to extend that deadline.

“The idea of an extension of the CARES Act is not controversial, so while there is disagreement (in Congress), everyone wants another COVID relief program to come forward, and every one of those has an extension in it,” MacKay said.

If a deal isn’t reached in Washington, the governor’s office is prepared to move CARES Act money around to fit the needs of state agencies and entities. For example, lawmakers granted up to $15 million to set up an eviction relief program, but with only a fraction of that money likely to be spent, some funding is being diverted to other programs, MacKay said.

“We’re removing (some funds) from the eviction prevention program into the judicial branch to help them, because they’ve clearly shown that they’ve spent the money that was allocated to them and have shown additional need to respond to COVID,” he said.

State officials should have a clearer idea of where the money can be used best by mid-November following the SLIB meeting Nov. 5, MacKay said.

“A couple months ago, the governor established a good plan for how to spend the $1.25 billion, and that just gave us a good baseline so that we can adapt as things change,” he added.

For officials in towns like Torrington, an extension of the spending deadline would likely come as a much-needed relief, especially as active cases of COVID-19 have crept up to record highs in the state.

“An extension would be helpful, because (the pandemic) is still ongoing,” Strecker said. “Especially here, we’re getting the virus later than everybody else, it seems like.”